Transshipment of Russian LNG at sea: desperate times — difficult decisions

Alexey Gromov, Principal Director on Energy studies at the Institute for Energy and Finance, commented to the Neft and Capital Internet portal on the possibilities of the Russian LNG transshipment on the high seas.

Russia is organizing ship-to-ship transfers of LNG in the Barents and Bering Seas, according to Reuters. The goal is to free up more Arc7 ice class tankers for its largest LNG producer, NOVATEK.

According to Alexey Gromov, what was written in Reuters confirms the hypothesis that NOVATEK will limit investments in future LNG production projects, but will focus on protecting existing projects from sanctions, including Arctic LNG 2.

LNG transshipment is a precedent that is not practiced in other countries. A kind of Russian know-how, because there is no other choice. But as Alexey Gromov noted, new infrastructure solutions of this kind are always more expensive at the first stage. When there is standardization and scaling, the cost of operations will begin to decrease.

Now it is difficult to say how much LNG will be transshipped, especially since it is not clear with the help of the FSU or from ship to ship under certain weather conditions.